Panandiker said that the taxation rates should be brought down in India to discourage people from stashing their money in tax havens. “High rate of taxation is one reason people are transferring black money outside the country and hiding them within the borders. Due to high taxes people try to evade paying them. So lowering the tax rates is probably one solution to stop the flow of black money. The lowering of taxes doesn’t cause reduction in revenue,” Panandiker added.
Asia has earned the top position in the list of stashing black money, as 61% of the total unaccounted money belongs to this continent. GFI said that the amount of illegal money going out from the countries emphasizes on the need of stricter measures like increasing exchanges of tax information and strengthening money laundering laws; requiring corporations to disclose sales, profits and taxes paid in foreign countries.
GFI suggested that instead of focusing on the already lost money, the Indian policymakers should find ways to curb the ongoing outflow of money. “While progress has been made in recent years, India continues to lose a large amount of wealth in illicit financial outflows. Much focus has been paid in the media on recovering the Indian black money that has already been lost,” said GFI Director Raymond Baker, as reported by First Post.
Disagreeing with the GFI's views, the Indian economist Panandiker said that steps should be taken to bring the unaccounted money as it is not lost but parked somewhere. “The word lost is not correct. Because that money is there. If you create the right situation, it can come back and some of it has already come back into the economy. According to some estimates the black money is too much. I think one should not forget it as it can come back,” added Panandiker.
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